August 25th 2023.
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Good news for households in England, Wales, and Scotland! Ofgem has announced that energy prices will be falling in October. The energy price cap, which limits the amount that suppliers charge households per unit of gas and electricity, is expected to drop from £2,074 to £1,923 per year - that's a saving of around £150!
According to energy consultancy Cornwall Insight, the price of gas per kilowatt hour will fall from 7.5p to 6.9p from October 1st, while the price of electricity will drop from 30.1p to just under 27p per kWh. This means that the average annual energy bill for a household in Great Britain will be reduced from £2,074 to £1,926.
Last winter, the Government's Energy Price Guarantee scheme meant that households were getting £66 off their monthly energy bills, reducing the average household energy bill for the winter months to £141 on a direct debit payment plan. However, this October's price cap could see households saving around £150, bringing the average household energy bill down to just £160 per month.
Unfortunately, the price cap will only remain at this level until January, at which point energy bills are likely to rise again. Experts at Cornwall Insight expect that bills will remain close to this level until October 2024.
National Energy Action, a charity, has warned that 6.3 million households could be trapped in fuel poverty this winter, a figure higher than last year. Adam Scorer, chief executive at NEA, said: “The price cap does not protect those who simply cannot afford the cost of keeping warm. The UK Government can still act by directly reducing energy bills via targeted energy discounts or a more targeted Energy Price Guarantee for low-income and vulnerable households. It knows how to do it. It has millions of pounds unspent from previous schemes. It is aware that failing to act will consign millions to another winter of despair and suffering.”
Mike Thornton, chief executive at Energy Saving Trust, has urged the Government to address the "root causes" of high energy prices in order to permanently lower them. He suggests investing in insulation to reduce energy needs, and offering financial incentives to households to make this possible.
It's important to remember that, while the price cap is good news for households in the short term, energy bills could rise again in the near future. Taking steps to reduce energy consumption now is the best way to ensure that bills remain low in the long run.
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